7 Leadership Secrets for 2017

         

  

By Thomas Eden

In the television series “Undercover Boss,” CEOs, owners and other high-level executives go “undercover” donning disguises, aliases, and bogus biographies and work temporarily as entry-level employees in their organizations. Working closely with various employees, the participants get a chance to see what it is like to work for the company and how they are perceived as a leader.

Toward the end of each show the executive’s identity is revealed, dedicated employees are rewarded, bad employees are shown the door and executive works to address the issues and breakdowns in the organization that employees helped bring to light. It is my most favorite supervisor video training session I give.

Despite the happy ending format and the requisite reality television manufactured tension and tear-jerker moments, the program offers 7 valuable leadership lessons for 2017:

Leadership Lesson: Being an effective CEO takes courage. CEOs on “Undercover Boss” might get some great publicity for their organizations, but only by being brave enough to expose themselves and their management policies on television. Heading up a company is a challenging job that requires risk taking and unconventional ideas, and for the Frontier CEO disclosing his Christian faith took courage.

Leadership Lesson: Realize that every employee has a story. You never will know their story if you do not take time to ask and breaking bread many times helps break the ice. Working side by side is a great way to hear the employee’s story. Listening is a learned trait of highly effective leaders and until they believe you care you will learn very little. 

Leadership Lesson: Small changes can make a big difference. Sometimes the management changes that boost morale and productivity the most on the show aren’t expensive or expansive, sometime it is just making employees feel respected again.

Leadership Lesson: Saying “thank you” matters. The ability to express genuine appreciation is a top leadership trait. When you see good work say it and a handwritten note of appreciation will be kept by an employee for years. Know that unplanned acts of kindness, hospital visit, or unexpected gift card for over the top service make a difference to the morale of the entire team.

Leadership Lesson: Every company has room for improvement. Realize that every employee wants to be heard and it is is okay to acknowledge that there are problems within an organization. The goal should be to address issues rather than ignore them. Most CEOs who appear on the show are shocked by at least one issue they identify on their undercover journey.

Leadership Lesson: Rewards should be personal. In every episode, the executive calls a few special employees to his or her office for an unveiling. At that time, the CEO makes sure to thank employees for their hard work and dedication to the company. This is a highly anticipated part of the show and viewers live vicariously through these employees as the CEO says “thanks.” The visit to the CEO’s office includes a reward tailored to each individual’s need, a goal they want to achieve, and examples include training and development, help with educational costs, financial needs. 

Leadership Lesson: CEOs are changed for the good of the entire team. The CEO meets with the entire team and explains what the experience did to them and how they will never look at front line jobs the same way and puts a human face on decisions.

Common Sense Counsel. Giving employees a voice is the absolute draw of Undercover Boss. In 2017 Managers need to create opportunities for gathering—and spreading—information without putting the CEO in a wig and glasses. Consider how your 2017 might be changed.

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com

No Compassionate Deed Goes Unpunished

 By Thomas Eden

Myra Furcron worked for Mails Centers Plus, as an outsourced mailroom employee at Coca-Cola when she was transferred to work with a male employee who suffered from Asperger’s syndrome. The complications associated with the disorder led to many difficulties for him in the workplace. He often exhibited mannerisms that are generally considered awkward and inappropriate, including staring, brushing up against employees, and talking in people’s faces, according to the alleged facts in a court opinion. 

Furcron initially attempted to befriend the male co-worker, but he mistook her friendly demeanor for flirtation. During their short six days working together, Furcron claimed he frequently entered her work area in the mailroom and invaded her personal space, stared at her from afar, and attempted to look down her shirt and at her underwear when she bent over. However more unsettling was Furcron’s observation that he frequently (“on a daily basis”) exhibited a state of arousal while staring at her and would deliberately bump and rub himself up against her. Other workers observed Furcron crying because she had to work with this man.

Furcron did not initially complain to her managers, even though she claimed the co-worker’s actions made her uncomfortable and diminished her job performance, because she recognized that his Asperger’s might have affected his behavior. Later, Furcron did make her concerns known to the offending co-worker, but his behavior continued, and ultimately Furcron complained to her supervisor detailing the misconduct and presenting a photo from the neck down of the co-worker in an aroused state. The supervisor’s response was that “he meant no harm, and that his conduct should be tolerated because of his disability.” Furcron complained on subsequent occasions, but the supervisor refused to take action, claiming the co-worker “had friends in high places at Coca-Cola, and it was out of his hands.”

Furcron was eventually fired for allegedly showing the neck down arousal photo of the co-worker, without his permission, to others in the workplace and discussing it with a human resources representative for Coca-Cola Co., one of her employer’s largest clients.

The case eventually ended up at the 11th Circuit Court of Appeals last week on Furcron’s claims of sexual harassment and retaliation which had been tossed out of court by the federal district judge after two supporting declarations were discredited. One was from a female co-worker who supported with “me too” evidence. The Court affirmed dismissal of the retaliation claim but allowed the sex discrimination claim to go to a federal jury. 

Common Sense Counsel: It is well settled that hostile work environment harassment occurs when unwelcome comments or conduct based on sex unreasonably interferes with an employee’s work performance or creates an intimidating, hostile or offensive work environment. Having a well written anti-harassment and professional conduct policy, annual company wide employee training on that policy, prompt and effective investigation of complaints and taking proper remedial action are all keys to a good HR risk reduction program. Also, allowing your compassionate heart for a disabled worker to cloud your good decisions on workplace misconduct will most likely come back to punish you! 

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com

Small Employers Can Again Offer HRAs

By Thomas Eden

Last week the 21st Century Cures Act was signed into law and effective January 1, 2017. Among many things from a moonshot cure for cancer to funding for substance abuse, the Act allows small employers of less that 50 employees, and who do not offer a group heath care plan, to once again offer Health Reimbursement Arrangements (HRAs) to their employees. These were banned under the Affordable Care Act (ObamaCare).

The 21st Century Cures Act once again makes HRAs permissible for small employers, with some changes. These Q&A should help you decide: 

Q. Who is a qualifying small employer? 

An employer that has fewer than 50 full-time equivalent employees and does not offer a group health plan.

Q. Must all employees be eligible for the HRA? 

No. However, only certain employees may be excluded. For example, the company can exclude employees who have been employed for less than 90 days, are under 25 years old, are part-time or seasonal, are covered by a collective bargaining agreement, or are resident aliens without U.S. source income.

Q. May the employee contribute to the HRA? 

No. Salary reduction contributions are not permitted. The HRA must be funded only by the company.

Q. What expenses can be reimbursed by the HRA? 

Expenses that constitute "medical care," including health insurance premiums, incurred by the employee or one of the employee's family members.

Q. Is there a maximum benefit? 

Yes. The HRA may reimburse up to $4,950 per year for an employee with employee-only coverage, and up to $10,000 per year for an employee with coverage for the employee and at least one dependent. These amounts are pro-rated if the employee is not covered by the HRA for the entire year. (These amounts are indexed to inflation and will increase in future years.)

Q. Are the reimbursements taxable income to the employee? 

No, provided that the employee is enrolled in minimum essential coverage. Reminder: "Minimum essential coverage" includes most individual and group health insurance, but does not include dental-only coverage, vision-only coverage, or coverage for a specified disease or illness.

Q. Must employees lose their unspent HRA balances at the end of year? 

No. A company may design the HRA so that the year-end balance carries over, or not.

Q Is a notice required? Yes. Employees eligible for the HRA on the first day of a given year must be given notice at least 90 days before the first day of the year. However, notice will also be considered timely if it is given within 90 days after the 21st Century Cures Act was adopted.

Common Sense Counsel: so if you are one of the hundreds of employers who gave up on offering group health insurance under ObamaCare, you now have a chance to help your employees with an HRA. Time is critical because you must provide employee notice within 90 days of January 1, 2107 to offer this benefit in 2017. This is exactly what employers do who wish to become a great place to work – again! 

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com

DOL updated Overtime Rule is Dead

By Tommy Eden

The Fifth Circuit on Thursday agreed to accelerate the U.S. Department of Labor’s appeal of an injunction blocking its revised overtime rule for white collar workers, requiring briefing in the case to be completed by the end of January 2017.

In its order, the Fifth Circuit said it will schedule oral argument in the case for the first available sitting after the close of briefing. The DOL requested an expedited appeal of a nationwide preliminary injunction issued by U.S. District Judge Mazzant on November 22 that its revised overtime regulations for white collar workers likely exceeded the agency’s authority.

Judge Mazzant blocked regulations that would have doubled the salary threshold for executive, administrative and professional workers, referred to as white collar workers, to be exempt from overtime pay requirements, impacting a projected 4.2 million workers. The DOL’s revision set the new floor at $47,476 a year salary and created an index for future increases, and was set to take effect on Dec. 1, 2016.

The DOL’s opening brief is due by Dec. 16 and any amicus groups wanting to file in support of the DOL must get their briefs to the court by Dec. 23, according to the order. The states’ response is due by Jan. 17, with any amicus briefs on their side due by Jan. 24. The DOL’s final reply brief is due Jan. 31, 2017.

Common Sense Counsel: The DOL updated Overtime Rule is Dead. The Briefing time has been stretched out so that Donald Trump will instruct his new DOL Secretary of Labor to kill this Obama Administration overreach. Incoming Secretary of Labor in the Trump Administration, Andrew F. Puzder is the CEO of CKE Restaurants, Inc. who has been called a “poster CEO for the regulatory reform effort,” has been a frequent lecturer at colleges and universities and a guest on business news programs including “Your World w/ Neil Cavuto,” “The O’Reilly Factor” with Bill O’Reilly, “Mad Money” with Jim Cramer, “Fast Money,” “Power Lunch” “Lou Dobbs Tonight” and “Squawk on the Street.” He recently co-wrote the book Job Creation: How It Really Works and Why Government Doesn’t Understand It. Puzder is a frequent author on economic and legal issues in periodicals such as Human Events, Politico, and the Orange County Register. n 2011, Puzder received the honor of contributing to Believe in America, Mitt Romney’s Plan for Jobs and Economic Growth. He was an Economic Adviser is a spokesman for the Romney Campaign for President. Puzder also served as a Delegate to the 2012 Republican National Convention and as the Chairman of the Platform Committee’s Sub-Committee on the Economy, Job Creation and the Debt.

In the words of a former administrator of the DOL’s wage and hour division, under President George W. Bush, Puzder’s likely nomination signals to employers that the DOL during the next administration “is going to operate in a more traditional and realistic way that recognizes most employers are trying to do right by their workers. …What we’ve seen in the Obama administration is the view that employers are not stakeholders but are lawbreakers. Under the next administration, effective enforcement of employment laws will include employers as part of the solution and not part of the problem.”

In a televised interview just days before the election, a Fox Business Network panel led by host Maria Bartiromo asked Puzder whether he would want to serve in Trump’s Cabinet. Puzder said “if the president asked me to serve, I would serve," but he later added that “I think it would be the most fun you could have with your clothes on to be in this Cabinet and get things going. It would be an amazing experience.”

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 205.222.8030

ERISA – Word You Need to Know

 By Thomas Eden

SunTrust Bank employed Kelly Foster as a Mortgage Loan Closer. In January and August 2012, Foster submitted claims for short-term disability benefits for missing work due to a variety of ailments. Her claims were denied based upon a failure to provide sufficient “objective medical documentation” in support of her claims. SunTrust terminated Foster on September 25, 2012, because of her absences from work. Foster then appealed denial of her short-term disability benefits claim. In October 2013, Foster submitted a claim for long-term disability benefits which was also denied.

In July 2014, Foster sued under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1132(a), to enforce her rights under both the short-term and long-term disability benefit plans. The Bank and its third party administrator moved for summary judgment based upon the fact that the short-term disability plan was an ERISA-exempt payroll practice and thus not reviewable under ERISA. The U.S. District Court independently found that since the short-term disability plan was paid from SunTrust’s general assets and was “entirely separate” from the Employee Benefits Plan, it was “properly characterized as a payroll practice” and exempt from ERISA.

On November 29, 2016 the DC Circuit Court of Appeals agreed and affirmed the dismissal of her federal claim as excluded from ERISA under this regulation: “The Department of Labor exempts from ERISA certain ‘payroll practices,’ including: ‘payment of employee’s normal compensation, out of the employer’s general assets, on account of periods of time during which the employee is physically or mentally unable to perform his or her duties, or is otherwise absent for medical reasons.” (citing 29 C.F.R. Section 2510.3-1(b)(2)).

Common Sense Counsel: This case is a great lesson for employers on the difference between a “Payroll Practice,” and Short Term Disability Benefits Governed by ERISA. ERISA is a term all employers and employees will come to know and appreciate in the coming month as President Elect Trump says he will “repeal and replace with something terrific” the Affordable Care Act (AKA Obama Care). The only multistate vehicle through which he can readily achieve this goal is through ERISA, which governs all employer sponsored group health insurance. ERISA has its own set of regulations on notice, claims adjudication, fiduciary duty and many other topics.

In 1945, Congress expressly acknowledged in the McCarran-Ferguson Act that regulation of “the business of insurance” was best left to the individual states. Since that time, the argument is regularly made that state regulation is “inefficient, costly and burdensome.” It is often asserted that the 50+ individual jurisdictions a nationwide carrier has to work with represent a “patchwork” of rules and standards – an agonizingly difficult and redundant regulatory system, one that adds costs and denies consumers the creativity of the free market to quickly develop and market innovative insurance products. So look for this to play out beginning in January 2017.

There is specific discretionary language, and plan exhaustion requirements, which should not only appear in your ERISA Plan documents, but also in your Employee Handbook. Handbooks should be reviewed every 2 years, or whenever a new President takes office. 

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com

Making America’s Homeland Safe Again

   












To:   Trump Transition Team

Re:   Making America’s Homeland Safe Again

From: Tommy Eden, Partner, Constangy, Brooks, Smith & Prophete, LLP; Constangy Immigration Practice Group and ABA Labor and Employment Section; Workplace Immigration Committee

Recognizing the Problem: foreign workers illegally migrate to the United States looking for jobs in sectors that American workers have been pushed out of or abandoned. American employers have for decades sought cheap labor in manual labor occupations, typically in agriculture and construction. This has led to the creation of an underground black-market economy: 1) where workers are sometime taken advantage of; 2) unsafe working conditions can occur; 3) gangs, prostitution and cartels can thrive; 4) American craft workers disappear; and 5) families are torn apart.  Fake IDs are rampant and the Form I-9 process in its current state is ineffective because the chances of any one employer being caught by ICE hiring those not lawfully in the country is extremely slim. Employers do not see hiring illegals as a crime, or not patriotic, but merely as the cost of doing business when there is an ICE audit. Federal criminal proceedings brought against an employer are extremely rare, as are criminal prosecution of alien criminals as occurred under the Bush Administration. In the states where E-verify is mandated, workers merely migrate to states where it is not.

Possible Solutions: demand reduction by American employers is the absolute linchpin of any program to reduce the draw to this country for illegal aliens. Call it A WALL OF EMPLOYER REJECTION by America’s employers who love their country. E-Verify is the most effective system devised to keep American employers accountable. Coupled with the new smart electronic Form I-9 effective 1.21.17 (please add electronic signatures), and some type of biometric identification system would present a formidable barrier to employers seeking to de-fraud the system. It would be a massive employer educational/indoctrination to train and migrate employers nationwide to use the electronic Form I-9 and E-Verify, but it must be done. 

Experiments by Several States:  in 2012 Alabama faced such a momentous task after the passage of  HB 56 Beason-Hammon Alabama Taxpayer and Citizen Protection Act spearheaded by Rosemary Elabash, Alabama Director of the National Federation of Independent Businesses, there were at least five major listening sessions for employers across Alabama of 300 to 500 employers represented. All of the major Alabama associations were enlisted and I was privileged to be one of the attorneys on the speaking panels and created a compliance blog at www.I-9solutions.com . It was a Herculean effort, but in the end an accountable immigration verification system was brought to the State of Alabama with mandated E-Verify for all employers. Memorandums of Understanding were entered into between ICE and the sheriffs’ departments throughout the State of Alabama. Other states making similar pushes are reflected on the attached Chart developed by the Practical Law Institute.

Model for Moving Forward:  most small employers throughout America receive their compliance information from voluntary associations they join, not from the government. Almost every segment of society in America has associations that supply information and train their members on a multitude of compliance topics.  Enlisting the goodwill and support of these associations, with a firm effective date, with adverse consequences for non-compliance, proved to be invaluable in Alabama to a successful program rollout. There is a high rate degree of trust between associations and their members.  In Alabama, Rosemary and I worked with Dr. Gary Lemme of the Alabama Cooperative Extension System, and Alabama Commissioner of Agriculture and Industries John McMillian, to help film and publish compliance solutions for thousands of employers. Coordination on a national basis of the employer association community, and Cooperative Extension Systems, would again appear to be a wise cost-effective method to rollout mandated E-Verify for all employers. The development of common training templates, video resources, Apps, listening sessions, social media, and on hands training using vocational colleges would appear to be a workable approach.

Carrot and Stick Approach with Employers: the offering of some type of tax incentives to early adopter employers, together with a spike in ICE desk audits, highly publicized factory raids, criminal prosecution of guilty employers, would appear to be the right kind of carrot and stick approach to start building a WALL OF EMPLOYER REJECTION. That coupled with President Trump taking to his bully pulpit against America’s employers who say they love their country, but hire illegals would be a great one to punch approach.

Strategy to Empty America’s Prisons: One of main beefs that American employers will have is no one to pick fruits, harvest tomatoes and lay concrete. Presently American has the largest prison population in the world. I have served as a volunteer in a prison ministry for 2 years through Church of the Highlands and these are my observations: 1) that 90% of those in prisons arrived there because of abuse of drugs or alcohol and drug related crimes; 2) that America has a tremendous able bodied workforce behind its prison walls that is eager for freedom that work brings and many have learned trade skills; 3) employers need an excuse to hire ex-offenders such as tax credits and unemployment premium tax holidays; 4) corrections should move to the community level with split sentencing, local tough love judge supervision, drug treatment courts, mental health treatment courts, veterans courts, and restorative justice training and coaching teamed up with local faith based non-profit institutions to bring peace between offenders and victims; and 5) wide spread use of drug free workplace programs to create a barrier to drug use in the workplace and place offenders hired to work on a last change agreement, along with drug treatment programs, may be a workable solution to helping them deal with addiction and becoming productive tax paying citizens. 

Local Sheriffs are the Missing Enforcement Key: I recently set down in a meeting at the Lee County Republican Party Executive Committee and began talking with my friend and fellow committee member Lee County Sheriff Jay Jones and explained that I was drafting a position paper on the Alabama immigration experience and what suggestions he might offer to strengthen the system.  His immediate response was “interesting that you raise the subject because just this week an official from the Montgomery ICE office had approached him about having one of deputies trained under Section 287(g) Delegation of Immigration Authority program.” It was explained to Jay that ICE works closely with federal, state and local law enforcement partners in this mission. The 287(g) program, one of ICE's top partnership initiatives, allows a state or local law enforcement entity to enter into a partnership with ICE, under a joint Memorandum of Agreement (MOA), in order to receive delegated authority for immigration enforcement within their jurisdictions. Fact Sheet at https://www.ice.gov/factsheets/287g The only department in Alabama who has entered into an MOU thus far is the Etowah County Sherriff Department. Jay was eager to look into entering the program until he learned that there was no federal reimbursement for the time of his deputies to perform the background check duties of an ICE officer, who typically drives in from Montgomery. So if funding per background inquiry that results in a successful detention could be arranged in the MOU, the possibly of having a virtual ICE presence in every county in America might become a reality. Who better than local sheriffs know the bad actors in their community and desire to make those community safe again. And there are Sheriffs associations in every State who could endorse the 287(g) program.

Please let me know how I, or our firm, might be of service to the incoming Trump Administration.

Questions:              Tommy Eden, Esq.

                                teden@constangy.com

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